Fat Man Strategy

外汇网2021-06-19 16:34:45 213

A takeover defense tactic that involves the acquisition of a business or assets by a target company. The strategy is based on the pmise that the bulked-up company - the "fat man" - would have reduced appeal to a hostile bidder, especially if the acquisition increases the acquirer's debt load or decreases available cash.

Taobiz explains Fat Man Strategy

This is a type of "kamikaze" defense tactic, which inflicts potentially irreversible damage on a company to pvent it from falling into hostile hands. However, it involves adding assets rather than pesting them as is the case with other kamikaze defense strategies. A disadvantage of this tactic is that acquisition candidates need to be identified well in advance of a hostile bid, otherwise there may be insufficient time to complete a fat man transaction.

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